CSP Inc. Reports Fiscal 2021 Fourth Quarter and Full Year Results; Quarterly and Annual Gross Margin Continued to Expand
CSP Inc. (NASDAQ: CSPI) reported its fiscal 2021 Q4 results, revealing a 10 million revenue, down from 14.3 million a year ago. Despite this, the company achieved a record backlog of 13 million, marking a 165% year-over-year increase. Gross margin improved to 41.7% in Q4, up from 31%. Net income from continuing operations rose to $353,000 ($0.08 per share) compared to $36,000 ($0.01 per share) last year. Full year revenue decreased to 49.2 million from 61.8 million, but net income for the year was $699,000 ($0.16 per share), up from a net loss of $1.4 million.
- Achieved record backlog of $13 million, a 165% increase year-over-year.
- Gross margin improved to 41.7% in Q4, the eighth consecutive quarter of year-over-year improvement.
- Net income from continuing operations increased to $353,000 for Q4 from $36,000 in the previous year.
- Full year net income of $699,000, a significant improvement from a net loss of $1.4 million.
- Q4 revenue decreased to $10 million from $14.3 million year-over-year.
- Full year revenue declined to $49.2 million from $61.8 million in the prior year.
Achieves Record 9/30 Backlog of
LOWELL, Mass., Dec. 08, 2021 (GLOBE NEWSWIRE) -- CSP Inc. (NASDAQ: CSPI), an award-winning provider of security and packet capture products, managed IT and professional services and technology solutions, reported financial and operating results for the fiscal 2021 fourth quarter and full year ended September 30, 2021, and provided a business update.
Fourth Quarter/Full Year Operating Highlights and Recent Achievements
- Services revenue grew
27% compared to the year-ago fourth quarter - Favorable revenue mix led to a quarterly and annual gross margin of
41.7% and32.8% , respectively - Company-wide year-end backlog reached
$13 million demonstrating solid customer demand for products and services and reflects a165% increase over the prior year - Prudent expense management and emergence and continued acceptance of new products and services provides management with the resources to execute the multi-year growth strategy
- Recorded a one-time
$465,000 gain in the fourth quarter from release of escrow money from the sale of our German subsidiary in 2018
“The demand for our products and services remain at an all-time high as we ended the fourth quarter with record backlog of
With the Technology Solutions (TS) business again leading the way, our Managed Services Practice (MSP) continued to add new and larger customers while the better-than-expected activity level of Unified Communication as a Service (UCaaS) is garnering enthusiasm in the current fiscal first quarter. I believe UCaaS will turn profitable in the coming quarters, which is quite a feat since it was launched two years ago and just prior to one of the worst imaginable periods in our country. While the HPP business had a slight rebound from Q3, the signing of additional ARIA customers in the quarter and amount of interest being generated supports our view that it will dramatically change the revenue contribution from the HPP business.
Our team continues to perform at a high level. However, the effects of COVID-19, inflationary and supply chain pressures being felt across all businesses means a return to a more normalized business environment will be slower than expected. Nevertheless, we remain focused, and our sales team is putting greater emphasis on software sales since these can deliver near-term revenue and further expand our gross margin, as was the case in the fiscal fourth quarter. For fiscal 2022, we remain cautiously optimistic, and I believe it will be an exciting year for CSPi as ARIA and UCaaS gain traction. Further, we have received orders for several cruise ships, and we are optimistic of a return to executing our highly profitable cruise line business. We have a solid foundation to build from, even during these turbulent times, and will execute on opportunities that strengthen our long-term growth and profit ambitions.”
Fiscal Year 2021 Fourth Quarter Results
Revenue for the fiscal fourth quarter was
Gross profit for the fiscal fourth quarter was
Also, in Q4 the Company reported a one-time gain of
Net income for the fiscal fourth quarter of 2021 was
The Company had cash and cash equivalents of
Fiscal 2021 Full Year Results
Revenue for the full year ended September 30, 2021, was
Conference Call Details
CSPi Chief Executive Officer Victor Dellovo and Chief Financial Officer Gary W. Levine will host a conference call at 10:00 a.m. (ET) today to review CSPi’s financial results and provide a business update. To listen to a live webcast of the call, please visit the “Investor Relations” section of the Company’s website at www.cspi.com. Individuals may also listen to the call via telephone, by dialing 800-891-3968 or 785-424-1675 and using the conference ID: CSPQ421 when greeted by the live operator. For interested parties unable to participate in the live call, an archived version of the webcast will be available for approximately one year on CSPi’s website.
About CSPi
CSPi (NASDAQ: CSPI) operates two divisions, each with unique expertise in designing and implementing technology solutions to help their customers use technology to success. The High Performance Product division, including ARIA Cybersecurity Solutions, originated from supporting initiatives for the Department of Defense and Western intelligence agencies related to network monitoring, data protection, and intelligence initiatives. This focused mindset now results in foolproof data protection, enterprise wide. Our ARIA Software Defined Security solutions set provides enhanced network security, as well as accelerating incident response capabilities, while our Myricom nVoy Series appliances provide automated breach identification and notification, enabled by the 10G dropless packet capture inherent in our Myricom intelligent adapters. CSPi’s Technology Solutions division helps clients achieve their business goals and accelerate time to market through innovative IT solutions and professional services by partnering with best-in-class technology providers. For organizations that want the benefits of an IT department without the cost, we offer a robust catalog of Managed IT Services providing 24×365 proactive support. Our team of engineers have expertise across major industries supporting five key technology areas: Advanced Security; Communication and Collaboration; Data Center; Networking; and Wireless & Mobility.
Safe Harbor
The Company wishes to take advantage of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking under the Act. Such forward-looking statements may include, but are not limited to, in addition, we just launched ARIA CloudADR to help provide organizations with COVID-19 tightened budgets, a lower entry cost solution to help protect against cybersecurity threats. As such, we believe we have a substantial opportunity ahead of us as our fiscal year unfolds, we continue to weather the COVID-19 impacts, supply chain issues have affected the timing of our sales and there is no short solution to this world-wide problem as disclosed daily in the world media and with a solid balance sheet we believe we have the resources to manage the business and are positioned to execute our operating strategies when our target customers are able to introduce new solutions into their operations.
The Company cautions that numerous factors could cause actual results to differ materially from forward-looking statements made by the Company. Such risks include general economic conditions, market factors, competitive factors and pricing pressures, and others described in the Company's filings with the Securities and Exchange Commission (“SEC”). Please refer to the section on forward-looking statements included in the Company's filings with the SEC.
| CSP INC. AND SUBSIDIARIES | ||||||||
| AUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (Amounts in thousands) | ||||||||
| September 30, 2021 | September 30, 2020 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and short-term investments | $ | 20,007 | $ | 19,264 | ||||
| Accounts receivable, net | 18,698 | 13,362 | ||||||
| Inventories | 3,989 | 5,285 | ||||||
| Other current assets | 6,340 | 3,678 | ||||||
| Total current assets | 49,034 | 41,589 | ||||||
| Property, equipment and improvements, net | 764 | 1,047 | ||||||
| Operating lease right-of-use assets | 1,358 | 2,014 | ||||||
| Long-term receivable | 7,522 | 3,642 | ||||||
| Other assets | 4,296 | 5,353 | ||||||
| Total assets | $ | 62,974 | $ | 53,645 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities | $ | 17,827 | $ | 12,977 | ||||
| Pension and retirement plans | 4,097 | 6,471 | ||||||
| Operating lease liabilities | 821 | 1,390 | ||||||
| Notes Payable | 876 | 2,485 | ||||||
| Other non-current liabilities | 5,307 | 788 | ||||||
| Shareholders’ equity | 34,046 | 29,534 | ||||||
| Total liabilities and shareholders’ equity | $ | 62,974 | $ | 53,645 | ||||
| CSP INC. AND SUBSIDIARIES | ||||||||||||||||
| AUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (Amounts in thousands, except per share data ) | ||||||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Sales: | ||||||||||||||||
| Product | $ | 5,700 | $ | 10,885 | $ | 35,226 | $ | 47,989 | ||||||||
| Services | 4,311 | 3,387 | 13,982 | 13,804 | ||||||||||||
| Total sales | 10,011 | 14,272 | 49,208 | 61,793 | ||||||||||||
| Cost of sales: | ||||||||||||||||
| Product | 4,346 | 8,670 | 28,024 | 39,907 | ||||||||||||
| Services | 1,491 | 1,173 | 5,035 | 4,719 | ||||||||||||
| Total cost of sales | 5,837 | 9,843 | 33,059 | 44,626 | ||||||||||||
| Gross profit | 4,174 | 4,429 | 16,149 | 17,167 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Engineering and development | 696 | 717 | 2,887 | 2,798 | ||||||||||||
| Selling, general and administrative | 3,825 | 4,198 | 14,624 | 15,793 | ||||||||||||
| Total operating expenses | 4,521 | 4,915 | 17,511 | 18,591 | ||||||||||||
| Operating loss | (347 | ) | (486 | ) | (1,362 | ) | (1,424 | ) | ||||||||
| Other income (expense), net | 276 | (203 | ) | 2,040 | 362 | |||||||||||
| Income (loss) before income taxes | (71 | ) | (689 | ) | 678 | (1,062 | ) | |||||||||
| Income tax expense (benefit) | (424 | ) | (725 | ) | 444 | 384 | ||||||||||
| Net income (loss) from continuing operations | $ | 353 | $ | 36 | $ | 234 | $ | (1,446 | ) | |||||||
| Discontinued operations: | ||||||||||||||||
| Gain from sale of discontinued operations | $ | 465 | $ | — | $ | 465 | $ | — | ||||||||
| Net income (loss) | $ | 818 | $ | 36 | $ | 699 | $ | (1,446 | ) | |||||||
| Net income (loss) attributable to common shareholders | $ | 781 | $ | 34 | $ | 666 | $ | (1,446 | ) | |||||||
| Net income (loss) per share from continuing operations - basic | $ | 0.08 | $ | 0.01 | $ | 0.05 | $ | (0.36 | ) | |||||||
| Gain per share from sale of discontinued operations - basic | $ | 0.11 | $ | — | $ | 0.11 | $ | — | ||||||||
| Net income (loss) per share – basic | $ | 0.19 | $ | 0.01 | $ | 0.16 | $ | (0.36 | ) | |||||||
| Weighted average shares outstanding – basic | 4,192 | 4,064 | 4,151 | 4,028 | ||||||||||||
| Net income (loss) per share from continuing operations - diluted | $ | 0.08 | $ | 0.01 | $ | 0.05 | $ | (0.36 | ) | |||||||
| Gain per share from sale of discontinued operations - diluted | $ | 0.11 | $ | — | $ | 0.11 | $ | — | ||||||||
| Net income (loss) per share – diluted | $ | 0.19 | $ | 0.01 | $ | 0.16 | $ | (0.36 | ) | |||||||
| Weighted average shares outstanding continuing operations – diluted | 4,214 | 4,148 | 4,220 | 4,028 | ||||||||||||
| Weighted average shares outstanding discontinued operations – diluted | 4,214 | 4,148 | 4,220 | 4,028 | ||||||||||||
| Weighted average shares outstanding net income - diluted | 4,214 | 4,148 | 4,220 | 4,028 | ||||||||||||
Contact:
Gary Levine
CFO and Secretary
gary.levine@cspi.com
978-954-5040
FAQ
What were CSP Inc.'s earnings for Q4 fiscal 2021?
How did CSP Inc.'s backlog change in fiscal 2021?
What is the fiscal outlook for CSP Inc. following the Q4 report?
How much did CSP Inc. earn for the full year 2021?
